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Warren Buffett’s BNSF is a leader in moving fracked oil from North Dakota’s Bakken fields.

For the first time, DeSmogBlog has published dozens of documents obtained from the North Dakota government revealing routes and chemical composition data for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the legal dictates of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need-to-know” and not the public at-large.

“Ms. Zichal served as the top energy advisor to the President of the United States at a time when Cheniere was beginning construction on [Sabine Pass LNG],” Katie Pipkin, Cheniere’s senior vice president of business development and communications told DeSmogBlog. “The meeting was simply to inform and update the administration on that project.”

Pipkin also denied that two separate meetings took place in January 2013 between Cheniere and Zichal, telling DeSmogBlog, “Our records indicate only one meeting with Zichal on the 29th.” She did not respond to repeated requests for clarification on that claim.

According to a DeSmogBlog review of White House meeting logs, between 2009 and 2013, the Obama White House held 32 meetings with Cheniere board members and lobbyists, including the two attended by Souki, Desai and Outtrim.

Together, Souki and Outtrim attended four other meetings with White House officials and eight more each, either on their own or as part of other meeting blocs.

Some wonder whether Zichal will provide Cheniere even further top-level access to the Obama Administration if elected to the company’s board.

“Heather Zichal taking a position on Cheniere’s board of directors would be another example of the revolving door between those who set energy policies and the corporations that reap financial benefits from those policies,” Emily Wurth, water program director at Food & Water Watch, told DeSmogBlog.

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders’ vote and the company’s by-laws.

Among the audit dommittee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company’s annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere’s audit committee charter further explains.

The nature of what role Zichal will play on the board and audit committee of the first company to make a major bet on LNG exports remains unclear. But one thing remains clear: she joins a politically well-connected cadre of Cheniere board members.

And given Zichal’s former role as liaison between the oil and gas industry at the White House and her track record serving in that role, it raises the question: was she working for the industry all along?

“We have called on the White House to rein in these uncoordinated activities to avoid unnecessary and overlapping federal regulatory efforts and are pleased to see forward progress,” Gerard told the Associated Press in response to a question about the order.

A month later on May 15, Zichal spoke to API about her efforts and those of the Obama administration on fracking.

“It’s hard to overstate how natural gas — and our ability to access more of it than ever — has become a game-changer and that’s why it’s been a fixture of the President’s ‘All of the Above’ energy strategy,” she told API.

Just think about it: a few years ago, the conventional wisdom was that the United States would need to build more terminals to import natural gas overseas. And today, America is the world’s leading producer of natural gas and we’re actually exploring opportunities for exports.

Executive Order 13604 created an interagency steering committee with a goal “to significantly reduce the aggregate time required to make federal permitting and review decisions on infrastructure projects while improving outcomes for communities and the environment.”

“Zichal met more than 20 times in 2012 with industry groups and company executives lobbying on the proposed rule,” reported EnergyWire. “Among them were the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA), along with BP America Inc., Devon Energy Corp. and Exxon Mobil Corp.”

“The fact that one of Obama’s top climate advisors is now helping expand fossil fuel use raises questions about how deeply embedded oil and gas industry interests are in the administration,” Jesse Coleman, a researcher for Greenpeace USA told DeSmogBlog.

The rail industry offers up claims about how much it cares about safety when speaking to the public. But behind closed doors, the public relations pitch goes by the wayside in favor of hard-nosed lobbying muscle to avoid accountability.

“Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” said Hamberg.

“The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”

Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail’s presentations to OIRA.

Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.

“I’m not sure with the audience if you all understand how the current air brake systems on our freight trains out there operate today, but it’s basically 19th century technology,” said Connor.

Connor also described the performance of the brakes in an emergency situation as “painfully slow” in comparing ECP’s response time to that of the conventional braking system.

“One of the biggest advantages of ECP is that signal to apply your brakes…is going at the speed of light…it’s a much quicker signal,” he said.

Connor also discussed how ECP would “offer material safety advantages” over current technology in an oil train accident, even if expensive.

“For the purpose of why we would want ECP on, say, a unit train like these oil trains, [it’s] to reduce the impact of a derailment or reduce the damages caused by a derailment of these types of trains,” explained Connor.

“[The purpose] is you get a much quicker application, you reduce that kinetic energy involved with that train.”

The exploding CSX Corporation oil-by-rail train in Lynchburg, Virginia owned by Plains All American was on its way to the Yorktown facility. Yorktown has been marked a potential export terminal if the ban on exporting U.S. oil is lifted.

During his presentation at NYU, Shelanski spoke at length about how OIRA must use “cost-benefit analysis” with regards to regulations, stating, “Cost-benefit analysis is an essential tool for regulatory policy.”

But during his confirmation hearings, Shelanski made sure to state his position on how cost-benefit analysis should be used in practice. Shelanski let corporate interests know he was well aware of their position on the cost of regulations and what they stood to lose from stringent regulations.

With the “cost-benefit analysis” regarding environmental and safety issues for oil-by-rail in OIRA’s hands, it appears both the oil and rail industries will have their voices heard loudly and clearly by the White House.

A DeSmogBlog review of OIRA meeting logs confirms that in recent weeks, OIRAhas held at least ten meetings with officials from both industries on oil-by-rail regulations. On the flip side, it held no meetings with public interest groups.

“David and I have been out in the western portion of North Dakota where we have shared with him the challenges we’ve been facing to help make our nation and our world an energy independent country so that you and your fellow officers and enlisted folks never have to go over there again in order to fight for the oil we all need,” said Schmidt.

KKR — as we discovered in an earlier Open Records Statute request — required Schmidt to get legal clearance to fly on the private plane. Schmidt got the clearance within a couple of hours from Assistant Attorney General Janilyn Murtha.

Therefore, Murtha continued, “the conflict of interest provisions of the aforementioned code of conduct and associated fiduciary responsibilities are not implicated by the benefit described herein.”

Most important is what Murtha wrote next.

“If in the future the [State Investment Board] considers entering into a business relationship with KKR, and Treasurer Schmidt is then an acting board member, she may bring the prior contact with KKR to the attention of both the board and legal counsel and determine at that time if a conflict exists.”

The new documents also portray that, in the trip’s aftermath, KKR and the State Investment Board have kept in touch and scheduled a mid-July meeting to discuss ”entering into a business relationship” with one another.

New York, New York

A few days after the April 30 breakfast meeting held between the KKR team and both Hunter and Schulz, Hunter sent a thank you email to KKR’s Ari Barkan. Barkan serves as Director for KKR’s Client and Partner Group.

“I just wanted to drop you a note to let you know I truly enjoyed our meeting last week and found our conversation with David, Vance, Darren and yourself to be truly compelling,” Hunter wrote to Barkan. “As your schedule permits over the next few weeks, let’s attempt to set up a meeting in New York during the first two weeks of July or August.”

After kicking back-and-forth a few emails, Barkan told Hunter a mid-July business meeting date would work best for a meeting at KKR’s New York City office.

“Please also keep in mind that, at the moment, I am envisioning two separate topics of discussions – one connected to private markets and one to credit – so really we are talking about 1.5 hours for each one,” Barkan wrote in an email.

In the original video I initially obtained via Freedom of Information Act and published on YouTube, Schmidt thanked the troops at the National Guard event for fighting wars for oil “over there” so that we can all have a dependent flow of oil over here. The back-drop of Petraeus being in town was a field trip to the Bakken Shale oil fracking fields, which according to Schmidt’s short introduction, has helped make oil wars less necessary.

The oil wars video was obtained and published in part two of an ongoing investigative series published on DeSmogBlog.com about the Petraeus fracking field trip. Part three is currently being worked on and will be published soon.

For now, sit back, watch the video and stay tuned for part three of the series on DeSmogBlog.com. And if you like the video or any of the articles, please share them with your friends, family and colleagues!

Schmidt expanded on the initial comments she provided to DeSmogBlog in response to our findings obtained via North Dakota Open Records Statute. Among other things, she described the blurred lines existing between the North Dakota government, the oil industry and private equity firms like KKR as “not unusual.”

After explaining how she initially met Petraeus — who on top of his role at the KKR Global Institute, also works as an adjunct professor teaching KKR’s curriculum at CUNY Honors College, USC and Harvard University — Schmidt responded to a question by Port, saying it was “not something unusual” for KKRto draft the press release now published on the treasurer’s office website.

“We worked collaboratively with KKR to set things up. When you’re working with someone who has the caliber and in some cases security issues that I may not be aware of nor my staff, we always work together with staff of someone who’s coming to visit or someone of his caliber,” she said. “So to have them create a press release was not something unusual.”

Schmidt also cited another tie Petraeus has to North Dakota, which served as a major impetus for KKR and the treasurer’s office to co-manage the media scrupulously: Paula Broadwell.

Schmidt Thanks ND National Guard for Oil War

Petraeus resigned from the CIA in November 2012 after it got out that he had an extramarital affair with his biographer, Paula Broadwell.

In introducing Petraeus at the National Guard event, Schmidt thanked the troops in attendance for fighting in a war “over there for the oil we all need.”

“David and I have been out in the western portion of North Dakota where we have shared with him the challenges we’ve been facing to help make our nation and our world an energy independent country so that you and your fellow officers and enlisted folks never have to go over there again in order to fight for the oil we all need,” said Schmidt in a video obtained via Freedom of Information request by DeSmogBlog from the North Dakota National Guard.

Schmidt also told Port the North Dakota treasurer’s office was happy to do the media bidding of both Petraeus and KKR to ensure the National Guard speaking event went smoothly.

“Most people are familiar with the indiscretion that [Petraeus] had and its relationship to North Dakota,” she told Port. “And I was concerned this would take on legs and have a life of its own and that was something none of us wanted to see happen…I did not want this to become something it was never intended to be.”

“Smell Test”

Port also said on the show that DeSmogBlog’s alleged claim that “[Petraeus] was kept from the media doesn’t pass the smell test.”

“From 1998 to 2005, he served as the director and energy strategist for Deutsche Bank’s global oil and gas equity team,” his EIA biography explains. “Prior to that, from 1988 to 1997, Mr. Sieminski was the senior energy analyst for NatWest Securities in the United States, covering the major U.S. international integrated oil companies.”

A large part of Petraeus’ visit centered around a tour of the state’s Bakken Shale basin.

DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota’s government, the oil and gas industry and the private equity world. They also offer one of the first looks inside the professional life of former CIA Director Gen. David Petraeus after he resigned from the agency in 2012.

The documents reveal Kohlberg Kravis Roberts (KKR) — a private equity firm where Petraeus now works at the KKR Global Institute — wrote a press release for North Dakota’s State Treasurer announcing the Petraeus visit, meticulously counseled the state treasurer’s office on media strategy and hosted the state treasurer on its company plane.

“We have our own technical abilities attached to the firm we have our own back office [and] we can manage the daily flows of oil and gas in drilling wells and managing our own hedges,” said Lipschultz.

KKR’s Stage-Managing

At face value, the Petraeus visit seemed rather banal, garnering no national press attention and little local media coverage.

“Petraeus has a tie to the Bakken through private equity firm Kohlberg Kravis Roberts…which is partnering with other investors on a 164-acre housing development in Williston,” Dalrymple wrote. “Petraeus works for KKR as chairman of the KKR Global Institute.”

But e-mails reveal KKR stage-managed the entire event from start to finish, doing so quietly and behind the scenes.

“Gen. Petraeus would ideally like to learn as much as possible about realities on the ground connected with development of our shale gas/oil resources, including a sense of the challenges that operators, local/state governments, business leaders, and other community leaders are experiencing,” Barkan wrote.

“The development of these resources is one of the key underpinning (sic) of the nation’s renaissance, in his view, and he would be delighted to gain additional insights into what the benefits (sic) as well as the issues people are faced with.”

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